The 3.8 L was changed to the 4.2L in October, 1964 ( Phil Porter, "E-Type, Definitive History"). It was subsequently changed up to the Series 3, 5.3 L in 1971, to meet the US EPA demands for pollution, yet still offer the same/similar power. The Series 3 was only available in the 2+2 Coupe version and the convertible version.
Oh what a lovely XKE worth every penny of it's estimated value of $300,000 plus. A little elbow grease and some time spent polishing up this old boy, and one can be driving this on the roads of the UK running down cyclists and anyone who gets in the way like the original owner enjoyed. Take it racing this Jag has at least 9 lives. Just keep a can of car wax handy. As Wayne Carini would say a car can only be all original once. Do keep it in this form. Every other driver will be so envious they would want to buy it from you for say a half $million. When calculated into £ it's even more of a bargain.
Whenever I hear "they're only original once" pertaining to crusty, rusted hulk barn finds of muscle cars or classics, it always makes me think of someone who marries a super model, then dresses her in rags. Just because the car was abused doesn't mean that you have to continue the abuse. If the original condition is pristine, or nearly so, fine, but if it makes you sad to look upon it's tattered visage, by all means, restore it or pass it along to someone who will.